E-commerce services startup Hinge Consulting LLC, which recently landed a major private equity deal roughly three years after its launch, bears the hallmarks of a virtual overnight success. Unlike many startup founders, though, its CEO arrived at entrepreneurship after an extensive corporate technology career with roots in the U.S. Army.
Hinge started winning large corporate clients almost from day one as the company helped brands, retailers, manufacturers and distributors boost e-commerce revenues by accelerating their go-to-market strategies for Amazon and other online platforms.
“We manage the entire business for them and alleviate the complexity around having to learn a new platform, or a new capability, by providing information about the marketplace, developing a strategy and then implementing and executing that strategy on a daily basis,” founder and CEO Fred Killingsworth said in a recent interview.
The company’s own revenue, based on a “paid-for-performance” model, has expanded by triple-digit percentages annually, with growth expected to pick up speed this year as the new backing fuels expansion. In its first year, Hinge helped a baby-products client lift its Amazon sales to $60 million from $18 million, he said.
“We’re across about 30 different categories right now,” with global conglomerates, publicly traded footwear brands, baby product companies and food businesses among its client roster, which includes handbag brand Vera Bradley, Killingsworth said.
The profitable Cincinnati-based company also works with spice maker McCormick & Co.’s food services division on B2B sales to restaurant operators, and has helped athletic shoe company ASICS transition from a wholesaler relationship with Amazon to a seller operating its own store and working with specialty retail partners.
“This is an aggressive strategy that has helped their wholesale specialty-retail channel grow and has grown the ASICS brand share on Amazon significantly,” noted Killingsworth, 41, who worked as a senior development manager for Amazon before founding Hinge. “It was a significant undertaking and strategic investment to gain more control of their brand and price in the market.”
While Fortune 1000 corporations and other large customers comprise most of the company’s worldwide clientele now, Hinge also serves a host of small businesses. One e-commerce customer who had generated $2,500 in sales in December 2017 logged $98,000 in revenue in December 2018, Killingsworth said.
“We’re making dreams come true,” he said. “Its’ helping an entrepreneur really experience great success and sustainability. That’s fun.”
Clients often start with a non-cohesive digital and e-commerce strategy, using different branding on social media, their own website and e-commerce platforms, Killingsworth said. Hinge implements a “holistic digital strategy across all e-commerce platforms.”
If a client holds only a 2 percent category market share on Amazon but an 18 percent share everywhere else, Hinge tries to quickly close the gap, he said.
Investors and market watchers have taken notice.
Killingsworth said he met with Jefferies Group analysts last month to provide insights on an industry category, and on who is and isn't doing well on Amazon. The investment bank also invited him to participate on a panel at its Brands Still Matter Conference in March. That kind of thought leadership “is one of the reasons why we’re doing so well, especially with the large clients,” he said.
Last month, Vora Ventures, a Blue Ash, Ohio-based PE firm focused on B2B technology companies, announced that it had acquired Hinge.
“We believe that the B2B2C commerce market is poised for explosive growth globally,” Vora Ventures Executive Chairman Mahendra Vora said in announcing the investment.
“Hinge’s proven value to its clients, trusted brand and committed team will benefit from our global resources, strategic and infrastructural support, and business development expertise,” Vora said.
The Vora partnership allows Hinge to increase its technology investments and rapidly expand its global footprint, Killingsworth said at the time, noting the firm planned to expand its presence in Seattle, Chicago, San Francisco, London and India.
With a 25-person headcount in late January, Hinge has embarked on a hiring spree in the United States and Europe. Killingsworth recently forecasted a 35-person staff by the end of the first quarter and more than 50 by year-end. The staff includes five former “Amazonians,” including Killingsworth, and maintains a strong, cooperative relationship with the e-commerce giant, he said.
“Given our new equity partner, international expansion, product releases and strong blue chip sales funnel, we expect to blow 2019, 2020, 2021 out of the water and continue triple-digit growth,” he said.
Vora, seeking a CEO for one of his portfolio companies, reached out to Killingsworth about three years ago, the Hinge founder said. Killingsworth, however, was focused on creating and running his own business.
“As we began to grow and grow and grow,” he added, Hinge sometimes struggled to meet market demand in the timeframe needed. Vora helped out as “a great business mentor and coach” and investor, he said.
The venture firm has assembled the kind of technical talent who can help Hinge with larger clients and with mapping a multinational strategy. The partnership, Killingsworth said, “really gives us that scale and scope to take everything to the next level.”
Killingsworth formed Hinge in mid-2015,and went full-time with the business in early 2016 after spotting a problem that he said many companies faced in trying to conduct business on Amazon.
“They didn’t necessarily know how to do e-commerce,” which incorporates a wide range of capabilities including web design and inventory management, he said. Mom-and-pop shops trying to sell on Amazon weren’t alone; e-commerce also challenged venture-backed firms and major corporations.
Killingsworth thought he could solve the problem – and launched the service faster than he’d expected after turning a prospective employer into a client.
When a baby-gear company tried to recruit him as an employee, he told leaders there he wouldn’t be able to quickly make the changes they needed as a staff member but could do so as an outside consultant. “Two weeks later I had an invite to their board meeting to present,” he said.
The opportunity arose so quickly that Killingsworth called on a buddy to set up an email domain for his firm “literally while I was en route” to the meeting, he said. He signed the client within a few weeks. (This colleague became a partner, according to Killingsworth, who said he later bought him out.)
While Hinge has emerged and grown quickly, Killingsworth’s successful tech career paved the way. After growing up on a dirt road in rural North Carolina, he joined the Army seven days after his high school graduation, spending six years in the military and becoming a network engineer in the 101st Airborne.
“I’ve done most things the hard way,” taking a “blue collar approach to things,” he said.
After leaving the Army, Killingsworth joined Sprint Nextel and later Verizon Wireless, advancing through engineering, sales and management positions at the companies, eventually becoming vice president and director of mobile business development at credit card processor Vantiv before landing at Amazon.
While at Verizon, Killingsworth – “very fortunate” in finding success in customer solutions sales and design – landed a spot in a mentorship program, where he connected with executives Marni Walden and Bobby Morrison. (Walden later played an instrumental part in Verizon’s Yahoo acquisition; Morrison now oversees several Microsoft market segments.)
“They really helped shape how I think about business and the leadership style that I have,” Killingsworth said.
His own philosophy and style appear to have served him well.
“Just think big and work hard and everything is possible, and we continue to try to do that,” he said. “Be exceptional at the basics,” he added. “Empower people.”
Sourced from Forbes - written by Dinah Wisenberg Brin